City of Perry v. Procter & Gamble Co.

• Decision Date: 19 May 2016
• Docket Number: 15-CV-8051 (JMF)
• Citation: 188 F.Supp.3d 276
• Parties: City of Perry, Iowa, Plaintiff, v. Procter & Gamble Company, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

188 F.Supp.3d 276

City of Perry, Iowa, Plaintiff,

v.Procter & Gamble Company, et al., Defendants.

15-CV-8051 (JMF)

United States District Court, S.D. New York.

Signed May 19, 2016

Benjamin David Elga, Taylor Asen, Cuneo Gilbert and LaDuca LLP, Brooklyn, NY, Brian O. Marty, J. Barton Goplerud, Hudson, Mallaney, Shindler & Anderson, P.C., West Des Moines, IW, Jonas Palmer Mann, Audet & Partners, LLP, San Francisco, CA, Michael Andrew McShane, Audet & Partners LLP, Sanfrancisco, CA, Charles Joseph LaDuca, Cuneo Gilbert & LaDuca, LLP, Bethesda, DC, for Plaintiff.

Emily Johnson Henn, Covington & Burling LLP, Redwood Shores, CA, Henry Liu, Covington & Burling, L.L.P., Washington, DC, Michael C. Nicholson, Covington & Burling LLP, Eamon Paul Joyce, Sidley Austin LLP, Courtney Elizabeth Scott, Tressler, LLP, Paul J. Rutigliano, Meister Seelig & Fein LLP, Sean Timothy Burns, Carroll, McNulty & Kull, LLC, New York, NY, Daniel Adam Spira, James William Mizgala, Kara Lynn McCall, Sidley Austin LLP, Chicago, IL, Jennifer Lynn Mesko, John Quincy Lewis, Karl Andrew Bekeny, Michael James Ruttinger, Tucker Ellis LLP, Cleveland, OH, Jerry W. Blackwell, Mary S. Young, S. Jamal Faleel, Blackwell Burke P.A., Minneapolis, MN, for Defendants.

OPINION AND ORDER

JESSE M. FURMAN, United States District Judge:

Plaintiff, the city of Perry, Iowa ("Perry" or the "City"), brings this putative class action against six leading manufacturers of so-called "flushable wipes": Procter & Gamble Company("P&G"), Kimberly-Clark Corporation("Kimberly-Clark"), Nice-Pak Products, Inc.("Nice-Pak"), Professional Disposables International, Inc.("PDI"), Tufco Technologies Inc.("Tufco"), and Rockline Industries ("Rockline").Perry alleges that, contrary to Defendants' representations, the wipes are not actually "flushable" because they do not degrade after being flushed down a toilet.Instead, the wipes remain intact, creating clogs in and causing other damage to municipal sewer systems, wastewater treatment plants, and public buildings.Perry contends that it has suffered damages as a result of the harm to its water systems and public buildings, and asserts claims—on behalf of itself and a putative class of similarly situated municipalities—against Defendants for declaratory relief and various state-law causes of action, including breach of warranty, misrepresentation, and nuisance.Defendants now move to dismiss the Complaint pursuant to Rules 8and12(b) of the Federal Rules of Civil Procedure.For the following reasons, Defendants' motion is GRANTED in part and DENIED in part.

BACKGROUND

The following facts, taken from the Complaint, exhibits attached thereto, and statements or documents incorporated into the complaint by reference, are assumed to be true for the purposes of this motion.See, e.g. , Kleinman v. Elan Corp. , 706 F.3d 145, 152(2d Cir.2013);LaFaro v. N.Y. Cardiothoracic Grp., PLLC , 570 F.3d 471, 475(2d Cir.2009);Kernan v. Kurz–Hastings, Inc. , 175 F.3d 236, 240(2d Cir.1999).

Defendants each market and sell "flushable" personal hygiene products, primarily "wipes."(SeeFirst Am. Class Action Compl. (DocketNo. 78)("FAC")¶ 1).The Complaint defines "flushable wipes" as "all wipe products designed, distributed, marketed, and advertised by the Defendants as suitable or able to be flushed down a toilet without causing harm to plumbing, sewer, and septic systems."(Id.¶ 2).¹Defendants market the wipes, via product labeling and advertisements, as "flushable," able to "break up after flushing," and "sewer and septic safe."(Seeid.¶¶ 49-85)."Flushable" wipes are pre-moistened and, in order to maintain that moisture without breaking down prior to use, they have been engineered to have so-called "wet strength."(Id.¶¶ 24-25).Such "wet strength," however, also means that the wipes do not degrade easily (as, for example, toilet paper does), even when subjected to significant force.(Id.¶¶ 26, 28-31).As a result, the wipes remain intact as they pass through home plumbing and public sewer systems, causing clogs and other damage.(Id.¶¶ 33-36).More specifically, Perry contends that wipes have jammed its water system's lift stations (id.¶ 40), clogged and backed up its sewer pipes (id.¶ 41), and clogged pipes in municipal buildings (id.¶ 42).Flushable wipes have been identified as contributing at least in part to the clogs in each case.(Seeid.¶¶ 39-42).Perry has been unable to identify the manufacturer of any given wipe, but it notes that almost all of the "flushable" wipes available for sale in six large stores in Perry and the surrounding area are manufactured by one of the Defendants.(Id.¶¶ 43-44).

On October 13, 2015, Perry filed its Complaint in this Court, asserting eight claims for relief under state and federal law.(DocketNo. 1;seeFAC ¶¶ 110-164).Perry seeks to represent several classes of similarly situated plaintiffs: nationwide classes comprised of wastewater operators, entities that own or operate sewage lines, and entities that own or operate buildings that have experienced plumbing issues attributable to flushable wipes; and Iowa classes representing the same.(SeeFAC ¶¶ 95-96).Notably, this case is far from the only pending legal proceeding relating to whether "flushable" wipes are, in fact, "flushable."Consumers have filed at least fifteen putative class actions against one or more of the Defendants here (and, in some instances, other parties).SeeBelfiore v. Procter & Gamble Co. , 311 F.R.D. 29, 42–45(E.D.N.Y.2015)(listing cases).And there is at least one other putative class action, in the District of Minnesota, brought on behalf of municipal plaintiffs, with claims much like those in this case.SeeCity of Wy., et al. v. Procter & Gamble Co., et al. , No. 15–CV–2101 (JRT)(D. Minn.), DocketNo. 61(First Am. Class Action Compl.).²In addition, the Federal Trade Commission("FTC") is investigating the accuracy of the "flushable" label.SeeBelfiore , 311 F.R.D. at 45–47;see alsoid. at 79–80(referring "[t]he issue of an appropriate definition of 'flushable' wipes and related issues" to the FTC and staying the case pending those proceedings).Among other things, the FTC filed a formal complaint against Defendant Nice-Pak, and later entered into a consent agreement prohibiting Nice-Pak from marketing products as "flushable" unless they meet certain requirements.Id. at 45–47.(See alsoPl.'s Mem. Law Opp'n Defs.' Mot. To Dismiss First Am. Compl. (DocketNo. 105)("Pl.'s Opp'n")2 n.2).The FTC has also apparently conducted an informal inquiry with respect P&G's "flushable" products.SeeBelfiore , 311 F.R.D. at 47.

LEGAL STANDARDS

Defendants move to dismiss pursuant to Rules 8,12(b)(1), and12(b)(6) of the Federal Rules of Civil Procedure.Rule 8(a) requires that a pleading include "a short and plain statement of the claim showing that the pleader is entitled to relief."Fed. R. Civ. P. 8(a)(2);see, e.g. , Swierkiewicz v. Sorema N.A. , 534 U.S. 506, 514, 122 S.Ct. 992, 152 L.Ed.2d 1(2002)(holding that a complaint "satisfies the requirements of Rule 8(a)[when] it gives [the defendant] fair notice of the basis for [the plaintiff's] claims").A Rule 12(b)(1) motion challenges the court's subject-matter jurisdiction to hear the case.See, e.g. , Makarova v. United States , 201 F.3d 110, 113(2d Cir.2000)("A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.").In reviewing a motion to dismiss under Rule 12(b)(1), a court"must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff, but jurisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it."Morrison v. Nat'l Austl. Bank Ltd. , 547 F.3d 167, 170(2d Cir.2008)(internal quotation marks and citation omitted), aff'd , 561 U.S. 247, 130 S.Ct. 2869, 177 L.Ed.2d 535(2010).Moreover, a court"may consider affidavits and other materials beyond the pleadings to resolve the jurisdictional issue, but [a court] may not rely on conclusory or hearsay statements contained in the affidavits."J.S. ex rel. N.S. v. Attica Cent. Sch. , 386 F.3d 107, 110(2d Cir.2004)."The plaintiff bears the burden of proving subject matter jurisdiction by a preponderance of the evidence."Aurecchione v. Schoolman Transp. Sys., Inc. , 426 F.3d 635, 638(2d Cir.2005).

By contrast, a Rule 12(b)(6) motion calls for the court to determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a plausible claim for relief.Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868(2009).In evaluating a motion to dismiss pursuant to Rule 12(b)(6), a court must accept all facts set forth in the complaint as true and draw all reasonable inferences in the plaintiff's favor.See, e.g. , Burch v. Pioneer Credit Recovery, Inc. , 551 F.3d 122, 124(2d Cir.2008)(per curiam).More specifically, the court must distinguish between facts, on the one hand, and "mere conclusory statements" or legal conclusions on the other hand; the latter are not entitled to the presumption of truth and must be disregarded.Ashcroft , 556 U.S. at 678–79, 129 S.Ct. 1937.The court must then "consider the factual allegations in [the] complaint to determine if they plausibly suggest an entitlement to relief."Id. at 681, 129 S.Ct. 1937.A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."Id. at 678, 129 S.Ct. 1937(citingBell Atl. Corp. v. Twombly , 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929(2007) ).A plaintiff must show "more than a sheer possibility that a defendant acted unlawfully,"id. and cannot rely on mere "labels and conclusions" to support a claim, Tw...